) posted a 26.7% rise in adjusted earnings to $1.33 per share for
the third quarter of 2013 from $1.05 in the same quarter of 2012.
With this, earnings significantly beat the Zacks Consensus
Estimate of $1.14. Net earnings surged 29.3% to $55.6 million
from $43.0 million in the year-ago quarter.
Net revenues went up 12.4% to $413.8 million, exceeding the Zacks
Consensus Estimate of $410 million. Excluding foreign exchange
fluctuations, net revenues rose 11.6% from the prior-year
The increase in revenues was attributable to continued strength
in Critical Care, owing to the contribution from the acquisition
of LMA International in October 2012, higher average selling
price of products, and the non-stop introduction of new products.
Product Group Results
products increased 18.7% to $289.3 million. Excluding the impact
of foreign currency, net revenues rose 17.9%, due to higher sales
of anesthesia, vascular, urology, and interventional access
products. The rise in anesthesia product sales was attributable
to the contribution from the LMA International business,
partially offset by lower sales of respiratory products compared
with the third quarter of 2012.
products went up 5.2% to $73.2 million. Excluding the foreign
currency impact, net revenues increased 3.9% in the quarter,
driven by increased sales of ligation, suture and access
products, partially offset by a decline in sales of general
surgical instrument products from the prior-year quarter.
products fell 1.6% to $17.6 million. Excluding the impact of
foreign currency, net revenues also dipped 1.6% compared due to a
lower sales of intra-aortic balloon pumps compared with the
OEM and Development Services
slipped 8.5% to $33.7 million. Excluding the foreign currency
impact, net revenues declined 9.4%, driven by a decline in sales
of catheter, extrusion and performance fiber products from the
third quarter of 2012.
rose 13.5% to $192.5 million in the quarter. Excluding foreign
currency fluctuations, net revenues escalated 13.8%, largely
driven by LMA product sales, price increases and introductions of
new products, partially offset by lower sales volume of existing
scaled up 14.0% to $132.3 million. Excluding the foreign currency
impact, net revenues rose 9.6%, due to LMA product sales, price
increases, higher sales volume of existing products, and new
increased 21.2% to $55.3 million. Excluding foreign currency
fluctuations, net revenues escalated 25.2% in the quarter, driven
by LMA product sales, higher sales volume of existing products,
and price increases.
As previously disclosed, TFX agreed to acquire privately-held
Vidacare Corporation, the leading provider of intraosseous, or
inside the bone, access devices. Teleflex will finance the
transaction, valued at $262.5 million, using borrowings under its
revolving credit facility. The acquisition is expected to close
in the fourth quarter of 2013.
The acquisition is not expected to considerably impact Teleflex's
2013 revenues and adjusted earnings per share. However, it is
expected to contribute roughly $68-$72 million in revenues and
10-15 cents in adjusted earnings per share in fiscal year 2014,
excluding non-recurring purchase accounting items and other
acquisition and integration related costs.
Teleflex had cash and cash equivalents of $326.4 million as of
Sep 29, 2013, down from $337.0 million as of Dec 31, 2012. Total
debt increased to $985.4 million as of Sep 29, 2013 compared with
$970.0 million as of Dec 31, 2012.
In the first nine months of 2013, cash flow from operating
activities fell 3.5% to $134.2 million from $139.1 million in the
same period of 2012, mainly driven by higher inventories. Capital
expenditure rose 18.5% to $54.6 million compared with $46.1
million in the same period a year ago.
For 2013, TFX anticipates constant currency revenue growth
between 8.5% and 10%, down from the earlier guidance of 10% to
12%. The lower revenue guidance was driven by weaknesses with
respect to sales of its OEM and respiratory therapy products.
Teleflex expect weaknesses in those product lines to continue in
the fourth quarter as well. In the fourth quarter, TFX also
expects lower revenue in Asia due to the timing of certain
distributor negotiations which are progressing slower than
However, Teleflex upgraded its adjusted earnings per share
guidance due to its continued cost reduction efforts. The company
expects adjusted earnings per share in the range of $4.85 to
$5.00 compared with the prior outlook of $4.70-$4.90. The current
Zacks Consensus Estimate of $4.89 lies within the guided range.
Headquartered in Limerick, Pa., TFX is a leading provider of
specialty medical devices for a range of procedures in critical
care and surgery globally. We are encouraged about its
significant earnings beat in the third quarter and higher EPS
guidance. However, we are concerned about weaknesses in Asia and
some of its product markets that led to lower revenue guidance.
Currently, TFX retains a Zacks Rank #3 (Hold).
While we remain on the sidelines about Teleflex, stocks that are
performing well in the medical instruments industry include
Natus Medical Inc.
). All of them carry a Zacks Rank #1 (Strong Buy).
NATUS MEDICAL (BABY): Free Stock Analysis
CRYOLIFE INC (CRY): Free Stock Analysis
CYNOSURE INC-A (CYNO): Free Stock Analysis
TELEFLEX INC (TFX): Free Stock Analysis
To read this article on Zacks.com click here.